Why the Supreme Court Approval of Obama Care is a Victory for Conservatives . . and a Setback for Liberals

June 29, 2012 in Health Care "Reform", Health Policy by RangelMD

Conservatives love to hate the Affordable Care Act. They mock it by calling it “ObamaCare”. They use it to justify their delusions of Obama being a “socialist” president. Many doctors (who generally tend to be conservative) refer to ObamaCare as socialized medicine even though they earn upwards of $150-300 thousand per year from Medicare and Medicaid alone.

This is not Godzilla.

ObamaCare is about as similar to socialized medicine as Godzilla is to Pikachu. Socialized medicine means employment directly by the goverment, fixed salaries several times below private sector rates, special Medicare hospitals and clinics, centralized planning and funding, inefficiency, waste, long waiting times, and resource rationing.  Pickachu is not 267 feet tall and ObamaCare is not socialized medicine.

The reality is that conservatives and the private sector health care industry dodged a bullet back in 2010 when Congress passed the Affordable Care Act (aka, ObamaCare). For years, liberals had been dreaming of a universal health care system that would have been a true socialized single payer system. Secondary goals would have been the elimination of private sector health insurance companies and for-profit hospitals who’s greed and high profit margins the liberals blamed for the high cost of health insurance. This would have been accomplished either by unfair competition with goverment programs (tax payer supported programs would always be cheaper than private insurance) or by directly restricting participation by private health care companies in the goverment health care system.

But more level-headed moderate Democrats realized that Americans would never support a truly socialized system with its inherent inefficiency, restrictions, and rationing. So they tried a back door method of sneaking in socialized medicine. They called it the “public option” and claimed that it would help reduce the cost of private health insurance by providing competition from a goverment run insurance option.  The public option plan would keep costs low by eliminating profit motives, administrative costs, and excessive CEO salaries and perks.  Sounds rational especially if you’re a corporate hating liberal, except for the fact that these factors have very little to do with the high cost of health insurance. Overall, the health insurance industry had a profit margin of only 3.4% for 2008-09. Private jets for CEOs and insurance company profits are not what makes health insurance expensive.

Had the goverment gone into the health insurance business they would likely have discovered what the private health insurance companies already know; it is the high demand and high overall utilization of expensive health care resources by insurance beneficiaries that is driving up costs.  Given this reality, the public option insurance would not have been able to keep costs low and remain solvent without an influx of tax payer funds. Funding would have been provided with future legislation and a Medicaid-esq program would have been born. Supported by taxes and without the membership restrictions of true Medicaid, the public option would have grown and grown (like social programs tend to do) until most private insurance companies are driven out like the money changers from the Temple until the public option soon becomes the only option.

Lucky, this did not happen. What did happen was that the Affordable Care Act further solidified and entrenched the status quo. Although our current health care system is heavily funded by taxes (Medicare and Medicaid), the delivery side is still vastly within the private sector which means high efficiency, lots of innovation, and plenty of profit for health care providers. There’s nothing socialized about that.

Neither is there anything socialized about the individual mandate that requires all Americans (at least those who pay taxes) to be covered by medical insurance either through their employer, via their parent’s plan, a goverment program, or individually purchased. This closes a great loophole in American society whereby millions of relatively healthy and relatively young Americans would rather maximize their disposable income then have to spend some of it on health insurance. Their only health insurance plan is to go commando and hope that the tax payers pick up the majority of the medical costs in the unfortunate event of a sudden severe illness or accident. Home owners have to have insurance. So do drivers. It’s about being financially responsible. Conservatives used to be all about individual responsibility.  At least they were until Obama came out FOR it.

True, the Affordable Care Act is a gigantic spending bill but significant amounts of this spending will go towards the purchase of high-cost, all-inclusive health insurance policies, and additional funding for Medicare part D beneficiaries to close the funding gap for prescription medications known as the “Donut Hole“. This amounts to huge gifts for the health care insurance industry and especially for the pharmaceutical and biomedical industries which incidentally had the highest profit margins of all health care industries. Why would this make conservatives angry? They rant and rave about the coming socialist Apocalypse on Fox News but then rush out and  purchase stock in Amgen or Pfizer or Tenet Hospitals.

And while the Supreme Court let most of the Affordable Care Act stand, the majority decision did strike down the provision that would have penalized states for not participating in the massive expansion of Medicaid. This is a huge win for states who were facing budget crippling doubling of the costs of their Medicaid programs and a massive loophole headache for liberals who will see even fewer of the uninsured in this country get coverage if states opt out.

Speaking of . .

The liberals hail this ruling as a great victory for universal health care in this country. I have no idea why. Even before the Supreme Court ruling, the best estimates were that only about half of the 60 million uninsured Americans would be able to get coverage under the Affordable Care Act. Now that states can opt out of any Medicaid expansion without penalty, this number will likely be even lower. That’s nowhere near being “universal” in coverage.

Chief Justice Roberts. A true Conservative hero!

It might have been better for liberals if the Supreme Court had gutted the entire act. As I’ve mentioned, the Affordable Care Act serves to further entrench the current system. It’s the same system that has lead to decades of upward spiraling health care costs that has put affordable health care insurance out of the reach of tens of millions of Americans. The Affordable Care Act didn’t fix this problem. It’s the proverbial finger in the dike or a Band-aid for a sucking chest wound. Despite its name, the Act is anything but Affordable and the same problems will continue to occur with the same results, just with more goverment spending.  But the political capital to fix these problems will be gone since . . the Affordable Care Act was supposed to fix them in the first place. It’s far more difficult to try and convince the electorate to fix something that you claimed to have already fixed in  2010. So the system with the same problems will soldier on like a festering wound for decades to come.

And had the Supreme Court struck down the Affordable Care Act? At some point – maybe much sooner than later – the ranks of the uninsured would have grown to the point where even conservatives could not politically afford to ignore them. And given the rate that the political winds change in this country, it is possible that we could have ended up with a Democratic President and Congress within the next 10-20 years that would then have had the political capital to make a real stab at creating true universal health care in this country.

However, thanks to Justice Roberts and the liberal side of the Supreme Court, we won’t have to worry about real socialized medicine and universal health care in this country for at least the next several decades. Just because conservatives are booing the Supreme Court Decision does not necessarily mean that the decision was bad for them. It just means that they’re idiots.

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